The study of adipose tissue function and its role in obesity related disorders is a crucial area of research in light of the increasing prevalence of obesity and type II diabetes. Adipose tissue is an active endocrine organ that modulates systemic metabolism and insulin sensitivity. Adiponectin, an adipocyte-secreted factor, is well established to be crucial for maintaining insulin sensitivity in other metabolic tissues, such as liver and skeletal muscle. Its role in adipose tissue, however, remains to be elucidated. To this end, we have uncovered a novel and exciting role for intracellular adiponectin in adipocytes. Preliminary studies show that overexpression of non-secreted adiponectin enhances glucose tolerance and increases PPAR gamma target gene expression in vivo, similar to the effect of TZD treatment. Furthermore, mouse models that produce adiponectin from the liver, which is indistinguishable from that of adipocyte-derived adiponectin, are unable to overcome a high fat diet challenge. These data further support the observations that adiponectin may act locally within the adipocyte to modulate its functions. In vitro, data suggest that low molecular weight adiponectin can translocate to the nucleus and associate with PPAR gamma on PPAR response elements. In this study I propose to analyze the role of adiponectin in activating PPAR gamma target gene expression. Specifically, in Aim 1, I intend to further characterize the intracellular effects of adiponectin in vivo. In Aim 2, 1 propose experiments that will elucidate the mechanisms by which intracellular adiponectin enhances PPAR gamma target gene expression in vitro. The in vivo analyses described in Aim 1 will employ the use of three mouse lines, which inducibly express wild type adiponectin, a secretion-incompetent adiponectin, or liver-derived adiponectin, all within an adiponectin-null background. These model systems will allow specific analyses of intracellular and secreted adiponectin as compared to a wild type control. The in vitro studies proposed in Aim 2 employ the use of adiponectin-null MEFs with which we will study PPAR gamma target gene expression in the absence of adiponectin or in the presence of adiponectin mutants. These two aims will allow me to fully characterize the role of intracellular adiponecitn in vivo and to establish mechanisms by which intracellular adiponectin modulates PPAR gamma target gene expression in vitro